Balanced Scorecard Journal

Topics: Balanced scorecard, Strategic management, Management Pages: 16 (5316 words) Published: November 9, 2010
The development of the Balanced Scorecard as a strategic management tool 2GC Conference Paper
Ian Cobbold and Gavin Lawrie Presented at PMA Conference, Boston, USA, May 2002

© 2003 2GC Ltd. All rights reserved. This document is protected under copyright by 2GC Ltd. The following terms and conditions apply to its use: Photocopying - single photocopies may be made for personal use as allowed by national copyright laws. Permission from 2GC and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery; Derivative Works – Permission from 2GC is required for all derivative works, including compilations and translations; Electronic Storage or Usage - Permission from 2GC is required to store or use electronically any material contained in this document. Except as outlined above, no part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of 2GC Limited

2GC Limited Albany House, Market Street Maidenhead, Berkshire SL6 8BE UK +44 (0) 1628 421506

2GC Conference Paper
Abstract The Balanced Scorecard is a widely adopted performance management framework first described in the early 1990s. More recently it has been proposed as the basis for a ‘strategic management system’. This paper describes its evolution, recognising three distinct generations of Balanced Scorecard design. The paper relates the empirically driven developments in Balanced Scorecard thinking with literature concerning strategic management within organisations. It concludes that developments to date have been worthwhile, highlights potential areas for further refinement, and sets out some possible topics for future research into the field. The Balanced Scorecard and its development The Balanced Scorecard was first introduced in the early 1990s through the work of Robert Kaplan and David Norton of the Harvard Business School. Since then, the concept has become well known and its various forms widely adopted across the world (Rigby, 2001). By combining financial measures and non-financial measures in a single report, the Balanced Scorecard aims to provide managers with richer and more relevant information about activities they are managing than is provided by financial measures alone. To aid clarity and utility, Kaplan and Norton proposed that the number of measures on a Balanced Scorecard should also be constrained in number, and clustered into four groups (Kaplan and Norton, 1992, 1993). Beyond this, the original definition of Balanced Scorecard was sparse. But from the outset it was clear that the selection of measures, both in terms of filtering (organisations typically had access to many more measures than were needed to populate the Balanced Scorecard) and clustering (deciding which measures should appear in which perspectives) would be a key activity. Kaplan and Norton proposed that measure selection should focus on information relevant to the implementation of strategic plans, and that simple attitudinal questions be used to help determine the appropriate allocation of measures to perspectives (Kaplan and Norton, 1992). In essence the Balanced Scorecard has remained unchanged since these early papers, having at its core a limited number of measures clustered into groups, and an underlying strategic focus. But modern Balanced Scorecard designs also have a number of features that clearly differentiate them from earlier examples. This paper describes these changes as an evolution through three distinct ‘generations’ of Balanced Scorecard design. 1st Generation Balanced Scorecard Balanced Scorecard was initially described as a simple, “4 box” approach to performance measurement (Kaplan and Norton, 1992). In addition to financial measures, managers were encouraged to look at...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Importance Of The Balanced Scorecard Essay
  • Developing a Balanced Scorecard Essay
  • The Balanced Scorecard and Its Application to Hospitality Businesess Essay
  • The Balance Scorecard Essay
  • Essay about Balanced Scorecard
  • Pitfalls of the Balanced Scorecard Essay
  • Balanced Scorecard Essay
  • Essay about An Analysis of Balanced Scorecard

Become a StudyMode Member

Sign Up - It's Free